A report by Aecom has said that 2.5 million homes are needed to be built in London and the south-east if the region is to cope with future growth projections.

The multi-disciplinary firm, which, according to last year’s WA Top 100 published by BD, is the world’s second biggest architect, said local authorities across the region have underestimated the need for extra homes by one million.

It looked at the plans of 127 local authorities within a 60 mile radius of central London and said that 2.5 million homes – rather than the 1.5 million currently projected – were needed by 2036.

Aecom studied each of the capital’s boroughs Strategic Housing Land Availability Assessments which it said had identified sites for 685,000 homes in the period. But the firm said this was 423,000 fewer than is required.

Aecom’s managing director for Europe, Middle East and Africa, Andrew Jones, said the housing shortage was not just a London problem but affected the whole of the south-east.

“Limiting the conversation about the housing shortage to the [London borough] borders ignores the 700,000 people commuting into the city every day and the acknowledgment that London is the number one economic driver for the entire south-east. To properly manage London’s future growth, we must start looking at London as a metropolis of 20 million people that is economically, socially and culturally connected to the capital.”

He said that the equivalent of one new Milton Keynes needed to be built in the region every year to cope with a population that is expected to reach 24 million for the whole of London and the south-east by 2036.

Jones added that homes needed to be built around transport hubs and that in the future the suburbs will drive “quality living”.

He said: “Throughout the region, we need to make the most of existing and future transport connections through intensified development around tube and rail stations, to create revitalised centres with homes, workplaces and community amenities fit for the city’s future demographic and economy. With a focus on the quality of place and local identity, the suburbs will be new engines of innovation and quality living.”

Aecom said that the region’s population could be close to 30 million by 2065 making the capital one of a handful of global mega-cities.

Parents in the Westcountry fear their children will be “locked out” of their home towns by a combination of spiralling house prices and hikes in rent.

A poll for the National Housing Federation found 72% of parents in England were worried about rising rent levels and 81% about rising house prices and the impact of both on the next generation. In the Westcountry more than a third (39%) said it was unlikely their youngsters will have the chance to rent or buy a home in the area where they have grown up.

The results of the poll were published following a series of reports on surging house prices. The Land Registry, regarded as the most accurate guide by industry professionals, put the annual increase across the six-county South West stood at 5.9%, making the average property in the region worth £184,049. Government figures also showed that the cost of renting privately in the region had risen almost 6% in the last two years, with the average monthly rent now hitting £684. In the South Hams, rents rose 9.5% between 2011 and 2013 to £695. In West Devon average monthly private rents reached £630 last year, up 9.3% from £576 in 2011.

The YouGov poll, of almost 1,500 parents, also revealed that more than two thirds of parents (69%) fear children won’t be able to afford a home in future without their financial support.

Jenny Allen, from the National Housing Federation in the South West, said: “Parents should look forward to a bright and prosperous future for their children but are worried that they will end up being worse off than them. Are we really OK with the idea of some of our towns and cities being priced beyond the pay packets of young people? How will our communities survive if young people can’t afford to live there? This is the situation we’re facing if we don’t tackle the housing crisis. It’s taken a generation to create this broken housing market and will take us a generation to get out of it. We’re calling on all political parties to commit to end the housing crisis within a generation to ensure the situation doesn’t continue to worsen leaving our children to deal with the consequences. We want the next government to publish a long-term plan within a year of taking office that sets out how they will achieve this.”

The poll strikes at the heart of the housing problem that has dogged Westcountry communities for years and seen councils struggle to balance sufficient development, including affordable homes, with protecting the environment.

Councillor Edwina Hannaford, Cornwall Council’s portfolio holder for environment, heritage and planning, said the authority was trying to combat the issues. “For a rural local authority, we are top of the pile as far as delivering affordable homes goes,” she said. “Our track record goes before us. The merging Local Plan also set some really ambitious targets for affordable homes and in some areas we will be looking for that to be 50% depending where the development is. In St Ives, for example, we would expect any development to have 50% affordable homes, of which up to 70% could be for the rental market.”

Coun Hannaford said the authority was acutely aware of the need to protect “mixed” communities, particularly those in popular coastal towns and village where second home ownership was high. “We need vibrant communities,” she added. “We mustn’t allow places to become retirement villages. We want people to live and work in our coastal communities because that also supports services like retained firefighters and coastguard.

The Campaign to Protect Rural England (CPRE) believes targets for tens of thousands of new homes across Devon and Cornwall are far too high. It supports “housing where there is a genuine requirement” and says there is a “critical requirement for affordable housing”.

But a spokesman for CPRE Devon stressed that affordable homes needed to be priced realistically with average gross wages in the region of around £25,000. “We need genuinely affordable homes in the right place and at the right price,” he said. “That needs very careful and considerate planning. That should be through neighbourhood and town plans where local people can discuss local need, not figures based on theory. It is about neighbourhoods and parishes being responsible for themselves rather than top down targets.”